Judge: U.S. must release $679M in tribal virus relief funds

The U.S. Treasury Department must release $679 million in coronavirus relief funding for tribes that it intended to withhold while a court challenge over the agency’s initial round of payments to tribal governments played out in court, a federal judge ruled late Monday.

U.S. District Judge Amit Mehta in Washington, D.C., said the agency doesn’t have discretion to withhold the money that is part of a federal relief package that included $8 billion for tribes. He ordered the Treasury Department to disburse it among tribal governments by Wednesday.

"Continued delay in the face of an exceptional public health crisis is no longer acceptable," Mehta said.

The relief package was approved in late March with a deadline for the funding to be distributed to tribes by April 26.

The payments were delayed as the Treasury Department grappled with methodology. It decided to use federal tribal population data for the initial $4.8 billion distribution to 574 federally recognized tribes in early May. Much of the remaining $3.2 billion based on tribes’ employment and expenditure data went out Friday, the department said.

Mehta’s ruling came in one of several cases filed by tribes, some of which have been consolidated.

Mehta said no court order prevents the Treasury Department from releasing the $679 million. He allowed the department to withhold $7.65 million that the Prairie Band Potawatomi Nation of Kansas tribe alleges it was shortchanged in the initial distribution of funding.

The Prairie Band said the Treasury Department should have relied on the tribe’s own enrollment figures to calculate its share of the money.

Mehta denied the tribe’s request to halt further distribution of the money last week, saying the Treasury Department has authority to determine how to allocate the money. Attorneys for the tribe said Monday they are appealing.

The Treasury Department said the $679 million withholding would cover the Kansas tribe if the tribe wins its case and any other tribal governments that might raise challenges. That amounts to the difference between relying on data from the U.S. Department of Housing and Urban Development and the enrollment figures submitted by tribes.

"It’s a means of ensuring that Treasury has actually determined an appropriate amount and paid an appropriate amount," U.S. Department of Justice attorney Jason Lynch, representing the Treasury Department, said Monday during a court hearing in a related case.

In that case, tribes renewed a request to force the Treasury Department to disburse the remaining money, which Mehta granted.

Keith Harper, who is representing several tribes in the request, suggested earlier Monday that the Treasury Department withhold only the amount in question for the Prairie Band.

"The tribes have only until the end of this year to figure out how to spend these funds, and they can’t even make decisions on planning on how to utilize these funds," Harper said. "Every day that goes by is further difficulties for these tribal plaintiffs."

An undisclosed amount also was reserved for Alaska Native corporations in case the court rules in favor of the Treasury Department in a separate lawsuit brought by tribal nations over eligibility.